The Central Bank of Nigeria on Tuesday lamented the 1.7 per cent lending by banks to the agriculture sector, saying there was a need to increase funding to the sector in order to reduce the country’s food import bill.

The CBN Governor, Mr. Lamido Sanusi, expressed the dissatisfaction in Abuja, while delivering a keynote address at a workshop organised by the African Rural and Agricultural Credit Association.

The seminar, with the theme, ‘Enhancing the agricultural value chain through innovation’, was targeted at transforming the agriculture value chain.

Sanusi said with agriculture employing about 60 per cent of the population as well as contributing 42 per cent to the country’s Gross Domestic Product, there was the need to scale up funding to the sector.

He said, “Agriculture is the backbone of most African economies with about 60-70 per cent of the poor living in rural areas with livelihood derived directly or indirectly from agriculture. For us in Nigeria, agriculture employs 60 per cent of the population. It also contributes up to 42 per cent of the country’s GDP and about 75 per cent of the non-oil sector’s GDP.

“If wealth creation and poverty reduction is to be achieved, the need to adopt efficient and cost-effective financial services that support agricultural production and innovation across the value chain is urgent. Regrettably, the agricultural sector of the country accounts for only 1.7 per cent of total lending by banks even though the sector accounts for over 42 per cent of the country’s GDP.”

Sanusi, who was represented by the Deputy Governor, Corporate Services, CBN, Mr. Suleiman Barau, said the bank’s involvement in the workshop was a demonstration of its resolve to enhance innovative agriculture lending across the value chain.

To achieve this, he said farming should be viewed as a challenging business with the capacity to create wealth and improve living standards rather than be seen as an opportunistic vocation.

He added that the CBN, as part of its developmental role in the sector, had released the sum of N189.29bn to 237 beneficiaries under the Commercial Agriculture Credit Scheme.

According to the governor, since inception of the CACS in March 2009, the bank has been able to fast track agricultural development, promote job creation and stimulate private and public-sector investments in the agriculture sector.

Also speaking at the event, the Group Managing Director, Union Bank of Nigeria Plc, Mrs. Funke Osibodu, said the bank had, in the last 20 years, supported the sector financially.

She said the outcome of the workshop would enable banks to better structure their credit facilities to farmers.

Osibodu said, “For majority of banks, agriculture financing has not been an attractive and profitable sector for the deployment of shareholders/depositors’ fund due to the perception of high risks.